New Study: Small and Medium Companies Who Start Simple Grow Faster

NEW YORK —SAP SE (NYSE: SAP) today released new global research that reveals the importance for small and midsize enterprises (SMEs) to design their businesses to run simple from the beginning.

The announcement was made at the SAP SME Summit being held in New York City on Nov. 10, 2015.

As businesses grow, they gradually add new software and processes that introduce complexity into their operations, creating a network of disjointed solutions that can hamper efficiency and growth. According to a survey conducted by Knowledge@Wharton and SAP of small and midsize businesses, almost three quarters (72 percent) of leaders and team members say business complexity has hurt efforts to meet process and decision making goals. Over 30 percent said it “strongly inhibited” that ability, and 58 percent pointed directly to technology complexity as the culprit. Knowledge@Wharton is the online business journal of the Wharton School of the University of Pennsylvania.

While these growing companies see the need to leverage technology in the near future, only about half (49 percent) of senior leaders believe business simplification is of significant strategic importance today. That number jumps to 65 percent when asked if they believe it will be of significant strategic importance within the next three years. Looking ahead, 47 percent of respondents believe they will be using self-service tools when they are making decisions within the next three years, yet only 19 percent are currently using this kind of support.

“Business simplification is much more important to small and medium business than ever before,” said Rodolpho Cardenuto, president, Global Partner Operations, SAP. “The interconnected global economy has opened opportunities to small businesses that never existed before, but they come with new challenges as well. If these businesses think and plan from the beginning on how to run simple in the long run, they will grow faster and perform better.”

Small and midsize businesses need secure solutions that help them to start simple and stay simple with minimal risk or disruption to services. The path towards simplification requires a strategic plan that will get them to being digital, connected and able to grow their business. Running simple in the digital economy was identified as being more important the larger a business becomes. The earlier small and midsize businesses can design systems to help them stay simple, the faster they will grow.

Methodology

The survey “Simplifying the Future of Work Study” was conducted by Knowledge@Wharton and SAP, and consisted of 433 interviews of executives and managers at small and midsize companies. The regional split of survey respondents was: 60 percent North America, 23 percent Asia Pacific, 15 percent Europe, and 2 percent Middle East and Africa. Eighty-five percent of companies surveyed had less than US$500 million in annual revenue, and 15 percent had annual revenue between $500 million and $1 billion.

About Knowledge@Wharton

Knowledge@Wharton is the online business analysis journal of the Wharton School of the University of Pennsylvania. The Web site, which is free, captures knowledge generated at Wharton and beyond and shares it as articles and videos based on research, conferences, speeches, books and interviews with faculty and other experts on global business topics.

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